Moody's Analytics, a leader in risk management solutions, today announced the launch of RiskOrigins, an integrated, workflow-driven loan origination product that gives commercial lenders greater awareness and control over risk throughout the loan lifecycle.
RiskOrigins is an evolution of Moody's Analytics market-leading technology, used by more than 900 firms worldwide. Using RiskOrigins, lenders can design and deploy workflows customized to their business needs and desired risk profiles. The product includes "out of the box" support for Moody's Analytics probability of default (PD) models and a loss given default (LGD) framework for risk scoring, covenant compliance tracking, as well as counterparty management and financial statement spreading capabilities. A risk-based loan pricing module will be available in the first half of 2011.
The software enables pre-deal limit checking, so the credit quality of deals can be assessed early in the transaction. It also allows relationship managers to quickly produce "on the spot" product proposals and lets credit analysts understand the impact of a potential lending decision on their portfolio early in the lending process.
"RiskOrigins provides a timely solution for commercial lenders seeking to better manage and understand risk," says Jodi Alperstein, Managing Director, Product Management and Marketing at Moody's Analytics. "With new banking regulations such as Dodd-Frank and Basel III on the horizon, commercial banks need to adapt to higher regulatory capital and liquidity requirements, new transparency and risk management policies and better management of counterparty risk data. RiskOrigins helps address these issues while closely integrating risk management and lines of business to maximize risk return."
TowerGroup, which regularly surveys banking technology products, recognizes the importance of advanced analytical capabilities in the loan origination process. "Without advanced analytics capability that has been built from the bottom up, financial services institutions are destined to make less than optimal business decisions about loan approvals, pricing, limits and covenants on individual credit requests, and they are even less likely to measure correctly the potential impact of those decisions on loan reserves, capital allocation, and risk transfer," said Susan Feinberg, Senior Research Director for Wholesale Banking.
RiskOrigins also supports custom modeling, allowing lenders to make data-driven lending decisions that contribute to more accurate and efficient lending processes. The platform incorporates a risk data warehouse, allowing firms to centralize their counterparty and transaction risk data and retrieve it easily for reporting and audit needs.
Based on an open architecture, RiskOrigins can be integrated with proprietary and third-party applications and rating models. Using authoring tools, users can create their own internal rating models or use Moody's Analytics models as a starting point. RiskOrigins can also send loan data to back office and loan accounting systems.